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I do not think that we can afford to overlook the importance of the experience of these countries in this respect.

There is a single other feature of this bill to which I wish to refer in this connection. It contains a short-haul clause or law. Why? Why the necessity for it? The inexorable logic of the case is that the competitive rate is too low and the railroads are attempting to earn remunerative rates by putting unreasonable charges upon local traffic. there any other reason for a short-haul law? What is to be the effect of the prohibition of pooling? To make the competing rates still lower ; they being now too low, and to force the railroad company if it be possible to raise its local rates.

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How a man who insists upon the necessity and justice of a shorthaul law can also insist upon the necessity and justice of a prohibition of pooling, I am unable to see. You propose to remedy the already too low competitive rates by saying that the railroads shall not recoup for their losses upon the local traffic, and yet you propose to prohibit that very thing which the railroad companies have adopted as the only means known to them to prevent competitive rates from going still lower. You put the railroad companies in the condition of a man under what was claimed to be the old Calvinistic theology, of which it was wittily rather than truly said that under its doctrine a man is "damned if he does, and damned if he don't." That is precisely what this bill proposes to do with the railroad companies of the country. In my judgment a more glaring inconsistency in legislation was never attempted than in this proposal to insert a short-haul law and the prohibition of pooling in the same bill.

But there is another point to which I did not allude at length when I was speaking of the competition which exists, that it seems to me makes pooling necessary and makes its prevention entirely improper. The American railroads which are competing between the West and the East under this bill with pooling prohibited will be absolutely at the mercy of the Grand Trunk Railroad of Canada. Whatever effect a short-haul and long-haul clause may have upon that traffic as diverting it to Canada, you may rest certain, I think-and I think experience justified me in the assertion-that if pooling is prohibited the traffic of the West comes to the seaboard through Canada and not over American roads. Why? Because by this bill you invite the Grand Trunk road to put down its rates without notice. It desires first of all things to insure business. Then it can put them up probably.

It is to-day making its arrangements, by the outlay of great amounts of money in securing improved cars and engines and the improvement of its track to do a greater through business. Now, prohibit pooling, put the bill in operation, and what will be the result? The Grand Trunk road may put all through business from the West to the seaboard down to an unremunerative point and make up for it recouping upon the local traffic through Canada, and we are powerless to prevent it. You may say that pooling would not prevent it; but it is the only means which the American roads have to secure any terms with the Grand Trunk road which shall give them any considerable share of the traffic which shall pass from the West to the seaboard.

I have already occupied more time than I desired, and, instead of

stating my own conclusion as to what pooling has accomplished, I prefer to state the conclusions of Mr. Nimmo, from whom I have frequently quoted during this argument and whom I quote with the more satisfaction, because I think he has given the matter as careful study perhaps as any man investigating it outside of railroad circles. As will be seen by his reports, he devoted at least eight years to a scientific and practical study of this problem. The history of every pool, the results of every pooling arrangement almost, are to be found in the tables and statistics of his internal commerce reports from 1879 to 1884. The conclusions of such an investigator are entitled to weight, and as they are clearly and tersely stated and coincide entirely with my own, I wish to adopt them.

In conclusion the following general observations may be made in regard to railroad federations or pooling organization:

First. They have been instrumental in preventing unjust discriminations through special secret rates to favored shippers, and the consequent demoralization of trade. Second. They have prevented many unjust and ruinous discriminations against towns and cities, and against particular States or sections of the country.

Third. They have put a stop to violently fluctuating rates.

Fourth. They have had the effect of protecting the weaker lines and of preventing their absorption by the stronger lines, and thus of conserving elements of competition in transportation.

Fifth. By preventing the absorption of the weaker by the stronger lines; they have prevented the threatened danger to the country of its being districted among a few great corporations, by which means the regulating influence of the competition of trade forces would have been eliminated, and transportation would have got the mastery of trade.

Sixth. They have tended to prevent those shocks to the financial interests of the country which generally accompany the bankruptcy of great railroad corporations.

Seventh. Since they have been adopted the railroad transportation facilities of the country have been greatly extended. The volume of traffic has also enormously increased, and rates have constantly fallen. These facts seem to prove that railroad federation has not had the effect of obstructing the beneficial operation of the competition of trade forces and of the direct competition between transportation lines. Statistics herein before presented clearly indicate this fact.

Eighth. The most hopeful aspect of federations for the division or pooling of traffic is that thereby the railroads have been brought to a condition in which their accountibility to the public interests may be more clearly defined, and in which any departure from undoubted principles of right can be observed and the responsibility therefore located. It is believed to be much easier to regulate great federations of railroads with respect to matters relating to commerce among the States than to regulate a great number of railroads acting independently, for the reason that these federations constitute concrete expressions of relationships and antagonisms both among railroads and among trade centers, and tend to illustrate the relative force of the same.

Ninth. Railroad pools have not proved to be rigid compacts, but they have been constantly subject to change. Occasional and even protracted wars of rates render their requirements at times almost entirely inoperative. This must, in the light of public interests, be regarded as a favorable symptom of their practical workings. The conditions surrounding and governing the commercial and transportation interests of the country arc constantly subject to change, and it is impracticable that any fixed rates or set of rules should be formulated which in practice would tend to prevent such changes.

The Senator from Massachusetts [MR. HOAR] asks me if I have in my mind statistics bearing on the point as to whether the net receipts of the railroad companies pay more on the average than a fair rate upon the capital invested. I think that was the question. I have not the exact figures. I sent home to Connecticut, my own State; I found this to be true of Connecticut, that the amount paid as dividends upon railroad stock in the State of Connecticut during the past year would average upon the whole capital stock of Connecticut railroads about 4 per cent. Of course some roads do not pay any, and one pays as high as 10 per per cent., but the average upon the capital stock of all railroads in the State

would be 41 per cent. The statistics for the whole country are not accurately in my mind at this time, but I think I will venture upon my recollection to say that the entire railroad dividends of the United States in the year 1885 applied to the entire capital stock of the railroad companies of the United States would produce a dividend of about 24 per cent. MR. HOAR. Do you mean stock unwatered?

MR. PLATT. I mean the stock as it stands, watered, if it has been watered, and undoubtedly it has been. The Senator from Colorado [MR. TELLER] says that is true in all cases. I think it is not universally true. Here is a railroad running into Washington-the Baltimore and Ŏhio— that has not increased its capital stock in many years, which has to-day, as I remember, only twenty millions of capital stock, though its property equals in valne the property of roads whose capital is three or four times as much. It is not true in a good many instances that might be mentioned. It is lamentable that it is too true in this country, but, as I said, the discussion of what rate of interest shall be paid upon the capital as it stands, including water, is outside of this discussion which I am now carrying on. I should say as severe things on that subject probably as any member of the Senate. I should be glad if there was some way to eliminate fictitious capital. I might regard competition as a blessing if when it bankrupted a railroad management the water should be eliminated before another management was set on foot; but that never will be. Mr. President, I have heard it suggested in reply to all this that we can pass this law and then pass another law directing the commission to investigate; and if the commission shall on the whole conclude on its investigations that pooling arrangements are not injurious to the public welfare, then we can repeal the section prohibiting pooling. That is after the fashion of what is known in Scotland as Jedburgh justice, for border marauders, "hang them first, try them afterwards." That is not a correct principle in legislation. We had better investigate first. All investigation so far, the weight of all testimony, the weight of all the testimony of students who have given the most attention to this problem, and the weight of the best informed railroad officers and railroad commissioners, shows the wisdom of legalizing and regulating, rather than prohibiting pooling.

I suppose that Senators will rise and tell me of specific instances where justice has not been done to localities or to individuals under pools. I reply first, legalize them and then regulate them by this commission and the evils will disappear. They are not inherent in the system. I reply, second, those evils would not be remedied by prohibitions of pooling. They would exist still and be intensified. Do not charge upon the pool that for which it is not responsible. Do not make it criminal to engage in such contracts because certain things occur, not chargeable to them, which you do not like.

The issue here, however, is not between legalizing immediately and prohibiting. It is between the proposition now before the Senate and the Senate bill, which, very properly in my judgment, sought to refer this matter for further investigation to the commission to be appointed under the bill. I submit to the Senate that a majority of its Senators today believes that it is the wise thing to do; that the intelligent judgment of Senators must bring them to this conclusion. If it is wise, why sur

render it? Shall we surrender it for the fear that if we do the wise thing here there may be obstinacy elsewhere which shall prevent any legislation at all? If that principle is to be adopted, then we are driven to this in the Senate, that whenever any legislation upon any subject is desirable and we have determined what legislation is wise, and politic, and just, we are to surrender our views as to that and agree to legislation which we deem impolitic, unwise and unjust, because otherwise we can not get any legislation at all.

Mr. President, others may yield their judgment upon what they consider vital matters for the purpose of getting some kind of legislation, but for one I am content to stand and take the judgment of the country upon my action when I vote only for what upon mature deliberation I believe is the best legislation. I do not believe that the legislation will fail if this bill goes back to a conference with an indication that the Senate will not consent to brand as criminal practices those arrangements which railroads have made to accomplish the precise object which is intended to be accomplished by legislation in this bill. I believe we may trust to the good judgment of conferees and of legislators not to do a thing which, upon reflection and investigation, they must be satisfied will probably, I may say almost inevitably, break up and demoralize the existing conditions of railroad service in this country.

Nine-tenths of all the interstate-commerce business done to-day is done under those arrangements which are sought to be damned because of the evil meaning which has been given to the word "pooling.'

Whatever of stability has been given to the railroad business, and through it to other business of the country, has been secured by these traffic arrangements, and in my judgment a bill which breaks them all up ruthlessly within sixty days, which invites the competition which is to demoralize business, will be far-reaching in its injurious results. For one, I prefer to stand by my judgment. I will try to have the courage of my convictions. I will try to do what I believe to be right, and I can not assent to a bill, which, though I accept its other provisions, I believe to contain a provision which I regard as positively vicious and wrong.

REMARKS OF MR. CULLOM,

IN THE U. S. SENATE JANUARY 10, 1887.

THE LONG AND SHORT HAUL CLAUSE.

Mr. CULLOM.-Mr. President, I have not risen for the purpose of making a general speech upon this subject. I have been more inclined to say nothing on the subject than to occupy any time whatever; but certain portions of the bill as reported by the conference committee have been very fiercely attacked, and seem to be in a measure misunderstood in my judgment, so that I have felt called upon to give expression to my views on one section of the bill alone at present. What I shall say to-day will be confined substantially to a discussion of the meaning of the fourth section of the bill. It may be that before the discussion is closed I shall have something to say upon other portions of the bill, but at present I shall confine my remarks to the fourth section.

Mr. President, the regulation of interstate railroad transportation is a subject that occupies a very conspicuous place in the thoughts of the American people. The magnitude of the vast interests to be affected by such regulation makes it necessary that the legislation proposed on the subject should receive the most thoughtful and deliberate consideration, for the commerce and prosperity of the entire country may be affected favorably or unfavorably, as the case may be, by the character of the regulations which Congress, in the exercise of its undoubted right to regulate, may see fit to impose upon interstate transportation by railroad. I recognize the importance and the great propriety of a full and free discussion of the measure now before the Senate, which may be so farreaching in its consequences, and I am anxious that the effect and meaning of the provisions of the bill shall be fully understood, in order that the Senate may act upon it intelligently.

Since the report of the conference committee was made public the bill as it now stands has been critically analyzed by the ablest representatives of the various interests that will be most affected by its passage, in case it shall become a law, and has received a great deal of attention from the press and from the general public. It seems to me that the bill has stood the test of this general and critical scrutiny remarkably well. Its general provisions seem for the most part to have met with approval, while the feature which has been most strongly objected to seems to have been misunderstood, if not misrepresented, and it is this feature only which I desire now to undertake to explain.

I have not had time to carefully read all the numerous expressions of opinion upon the bill that have come under my notice, but, so far as I have been able to do so, it appears that the railroad managers and others prominently identified with railroad interests who have expressed their views publicly have directed their attacks almost wholly upon the "short-haul" section and the one prohibiting pooling. For the most part they criticise these sections and express alarm at their supposed